Problem 3-42 (LO. 2) Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year Tax Book Debit/(Credit) Debit/(Credit) Assets Cash Accounts receivable Buildings $1,000 9,000 850,000 (700,000) 40,000 (10,000) $190,000 $1,000 9,000 850,000 (620,000) 40,000 (8,000) $272,000 Accumulated depreciation Furniture and fixtures Accumulated depreciation Total assets Liabilities Accrued warranty expense Note payable Total liabilities Stockholders' Equity Paid-in capital Retained earnings Total liabilities and stockholders' equity $0 (16,000) ($16,000) ($40,000) (16,000) ($56,000) ($50,000) (124,000) ($190,000) ($50,000) (166,000) ($272,000) Assume a 21% Federal corporate tax rate and no valuation allowance The beginning of the year book-tax basis difference is listed below for the deferred tax asset. Beginning of Year $30,000 The beginning of the year book-tax basis difference are listed below for the deferred tax liabilities. Accrued warranty expense Beginning of Year Building-accumulated depreciation Furniture and fixtures- ($62,000) (400) ($62,400) accumulated depreciation Subtotal In addition to the temporary differences, Kantner reported two permanent book-tax differences. It earned $7,800 in tax-exempt municipal bond interest, and it reported $850 in nondeductible business meals expense. Kantner's book income before tax is $50,000 Compute Kantner's current tax expense. Pre-tax book income $50,000 Book-tax adjustments Permanent items Add:tax-exempt income nondeductible business meals Temporary differences building depreciatior furniture and fixtures depreciation accrued warranty expenses Taxable income Current tax expense